Sebi chief UK Sinha calls for common BRICS bond market

"BRICS countries have created NDB to foster a collective growth path and now time is ripe to think of sharing experiences in developing the bond markets"

MUMBAI: Looking to deal with challenges surrounding debt securities trading, Sebi Chairman UK Sinha today pitched for developing a unified BRICS bond market for the benefit of all the member countries.

"BRICS countries have created New Development Bank (NDB) to foster a collective growth path and now the time is ripe to think of sharing the experiences in developing the bond markets and create an exclusive BRICS bond market," Sinha said here.

He was addressing a seminar on challenges in developing the bond market in BRICS, organised by Ministry of Finance and Confederation of Indian Industry (CII).

Sinha identified issues such as reliance of long term borrowers on banking sector, banks offering better instruments like cash credit and overdraft facilities and lack of adequate tax sops as challenges for developing a robust bond market.

He also said there is lack of interest from FPIs in the bond market.

Department of Economic Affairs Additional Secretary (Investment) Ajay Tyagi said there is enough potential among BRICS nations in terms of bond markets.

"In India, the government, in consultation with regulators RBI and SEBI... is initiating measures to further deepen and reinvigorate both primary and secondary market segments of corporate bond market," Tyagi said.

In another session, RBI Deputy Governor R Gandhi said the time is ripe for municipal corporations to look beyond conventional sources of financing.

"With the rising urban population, demand for urban infrastructure is picking up pace. To meet this enhanced financial requirement, the municipal corporations have to look beyond conventional sources," he said.

Since July 1, 2016, BSE bond platform has become operational for privately placed debentures. The amount raised on the platform is Rs 38,092 crore till date. Public issue of bonds in same period is Rs 19,700 crore. With this, the total amount comes to Rs 57,792 crore.

This has happened post new Sebi and RBI regulations promoting corporate bond market for large corporates.